Recent corporate law developments in Malta: a venture capital perspective
Stuart Firman
Ganado Advocates, Valletta
Over the years, Malta has introduced a number of corporate forms for the facilitation of international business, including protected cell companies (PCCs), incorporated cell companies (ICCs), securitisation vehicles and a range of specialised structures tailored to the needs of cross-border venture capital investors and complex financing arrangements. Certain recent reforms have shifted the focus towards more innovative and founder-oriented structures, such as the introduction of youth enterprises and sports private limited liability companies, alongside proposed extensions to the existing cell company framework for non-regulated companies and conversions, which remain yet to be fully implemented. Domestic developments run in parallel with the much-discussed ‘EU Inc’ regime, which, as most readers will already know, represents an ambitious attempt to create a harmonised, venture capital (VC) friendly company framework across the European Union.
This article examines these recent developments and their potential practical implications for venture capital structuring and cross-border scale-ups.
In parallel with these legal developments, Malta’s startup and scale-up ecosystem has become increasingly active in recent years, supported by initiatives such as Malta Venture Capital (MVC) and a growing number of incubators and accelerators, including the University of Malta’s TAKEOFF incubator for technology and research-based ventures, as well as more sector-focused initiatives like Basecamp for gaming and immersive technologies and SuperCharger Ventures, an edtech accelerator. This activity is complemented by Malta enterprise incentives, which provide growing businesses with access to grants, tax credits and financing instruments, often used sequentially as companies grow.
At the level of financing, Malta’s VC landscape remains relatively small but is gradually developing, with tax incentives for angel investors and the establishment of industry bodies aimed at fostering greater private sector participation. While a number of local success stories and high-profile investments have emerged in recent years, larger funding rounds often continue to involve foreign VC.
Despite these constraints, there are increasing signs of engagement from local entrepreneurs and high-net-worth individuals. With the inauguration of DiHub, Malta has taken further steps towards formalising its innovation ecosystem by providing a platform aimed at fostering collaboration between startups and scale-up businesses. This is complemented by Malta’s continued focus on emerging technologies, as reflected in Malta’s Artificial Intelligence (AI) Strategy, led by the Malta Digital Innovation Authority (MDIA). The MDIA combines regulatory oversight with a facilitative role, acting as both the market surveillance authority and the notifying authority for conformity assessments, while ensuring coordination across sectoral regulators. Importantly, it is also responsible for the development of innovation support tools, such as regulatory sandboxes, enabling businesses to test AI applications in a controlled environment.
Alongside this, entities such as Tech.mt play a role in promoting Malta as a technology and innovation hub internationally, supporting the attraction of foreign startups and investors and contributing to the development of a more visible and coordinated national tech ecosystem.
Following extensive amendments to the Companies Act (Chapter 386 of the Laws of Malta) in 2025, Malta has further demonstrated its agility as a jurisdiction over the past eight months, beginning with the introduction of the Companies Act (Youth Enterprise) Regulations (Subsidiary Legislation 386.32 of the Laws of Malta) and the Sports Private Limited Liability Companies Regulations (Subsidiary Legislation 386.33 of the Laws of Malta) (the ‘SPLLC Regulations’).
The local regulatory reforms
The Youth Enterprise Regulations introduce an innovative concept by allowing minors aged 16 to 17 years old to incorporate a limited liability company, subject, of course, to the relevant oversight and constraints. Certain key features include low capital requirements (€100 to €20,000), equal voting rights irrespective of contribution and shareholding, mandatory mentor oversight, albeit without control rights, and mandatory dissolution or conversion once the founders reach the age of 18.
While the rationale behind youth enterprises does not appear to be to create a vehicle for third-party investment, the regime is significant in signalling Malta’s willingness to rethink traditional concepts of corporate capacity and governance. It also introduces early exposure to structured decision-making, accountability and founder responsibilities, with the potential to contribute to the development of a pipeline of entrepreneurs who are already familiar with corporate and governance frameworks.
On the other hand, the SPLLC Regulations introduce corporate law concepts into the world of sport, which has traditionally operated through voluntary associations and non-commercial structures. The activities of a sports private limited liability company (SPLLC) must be limited to the management and operation of a club, but it is also entitled to invest in other entities with a core operation similar to that of the SPLLC. An SPLLC’s share capital must consist of a blend of Class A (commercial investors) and Class B (non-profit shareholders), with the Class B shareholders required to hold a minimum of ten per cent of the shares. SPLLCs are allowed to borrow and raise capital (connected to their main activity).
Unlike the youth enterprise regime, the SPLLC Regulations are more directly relevant to investment structuring, providing a framework through which commercial partners can participate in the ownership and financing of sports clubs, while balancing this with embedded governance safeguards designed to preserve sporting integrity.
EU developments
At the European level, the proposed EU Inc regime continues to be firmly on the radar of founders and venture capital investors alike. The scope of the proposed regime and the principle behind it should hopefully increase the competitiveness of the EU for scale-up businesses by improving the flow of capital across Member States. That said, while EU Inc may offer a promising corporate law solution, it does not by itself resolve many of the commercial and practical barriers that continue to constrain scale-ups. It should, therefore, be viewed as an important step towards reducing structural inefficiencies, rather than a complete solution to the broader commercial and ecosystem challenges faced by scale-ups.
When considered alongside Maltese company law, the proposed EU Inc regime reflects both a degree of similarity, which is probably due to Malta’s corporate rules being historically based on those of the United Kingdom, as well as clear differences.
From a Maltese corporate perspective, a number of core principles underlying EU Inc, including digital incorporation, corporate governance flexibility and the facilitation of cross-border activity, are already broadly consistent with the framework applicable to private limited liability companies. However, EU Inc departs more materially in its approach to capital structuring and investor mechanics, particularly through the absence of minimum capital requirements, the use of no-par value shares and a shift towards solvency-based safeguards. By contrast, Maltese law continues to rely on traditional capital maintenance rules, offering a more established and creditor-focused framework. In practice we expect EU Inc to operate alongside, rather than replace, existing Maltese corporate forms.
At the level of VC investment structuring, recent amendments to the Malta Financial Services Authority’s (MFSA) Investment Services Rulebooks and related documentation were introduced with the aim of explicitly allowing and/or clarifying, as applicable, the eligibility of fund structures to be set up as either European venture capital funds (EuVECAs) or European social entrepreneurship funds (EuSEFs), and the applicable requirements thereto. The MFSA had, in 2025, also launched the framework for collective investment schemes structured as limited partnerships without separate legal personality, referred to as special limited partnership funds (SLPFs). Given the flexibility of the limited partnership agreement and governance, liability structure, lack of separate legal personality and other related features, the SLPF is a useful option for consideration in the context of structuring private equity and VC funds.
As a whole, these welcome developments suggest that Malta’s approach is not limited to company law reform, but extends across the broader capital ecosystem, including both corporate vehicles and fund structures.
Conclusion
As these developments illustrate, company law in Malta and increasingly at EU level appears to be becoming a strategic tool for attracting founders and capital. Malta’s continued expansion of structured vehicles, including the ability of the minister in charge to extend the scope of cell company regimes and the introduction of sector-specific entities, demonstrates a willingness to actively shape its corporate attractiveness.
The proposed EU Inc regime goes further, seeking to remove structural barriers to scale across the EU Single Market. If implemented, it has the potential to materially change how EU startups raise capital and expand. However, its success will ultimately depend not only on legal harmonisation, but on how it interacts in practice with national regimes and investor expectations.
Taken together, domestic and EU-wide developments suggest that the evolution of corporate rules is not to be seen in isolation but as part of a wider push to enhance competitiveness and to create and attract more founders to operate and scale within the EU. The success of these developments, however, will not depend solely on their ability to attract founders. Equally critical will be whether these new corporate forms meet the practical and structural expectations of VC investors, enabling both startups and scale-ups to grow efficiently and access capital based on terms familiar to the market.